Assets of the world’s 300 biggest pension funds experienced their first decline since the beginning of the global financial crisis in 2015, down by more than 3% to a total of $14.8 trillion, compared with growth of over 3% in 2014, Pensions & Investments and Willis Towers Watson reported Monday.  

Although assets fell last year, cumulative asset growth since the crisis approached 19%, the research showed.  

North America had the highest five-year compound growth rate of around 6%, compared with 4% in Europe and 1% in Asia/Pacific.  

The world’s top 300 pension funds now represent 42% of global pension assets, as of March 31, the report said.  

During 2015, only hybrid plan assets grew, up nearly 14%, while all other fund types declined: defined benefit plans assets by 5%, defined contribution by 2% and reserve funds by an estimated 0.3%.  

“The continuing tides of asset rises and falls combined with ever increasing liabilities bears testament to how difficult it has become for funds to meet their respective missions,” Roger Urwin, global head of investment content at Willis Towers Watson, said in a statement.  

“Large asset owners can have an advantage in this volatile, complex and ambiguous investment world by improving organizational effectiveness to enhance decision making. It has become clear that good investment governance is the key determinant in producing the competitive edge necessary to transform portfolios and succeed in the ever-evolving mission of trying to pay benefits securely, affordably and in full.”  

The new research showed the U.S. continued to have the largest share of pension fund assets, with 38%, while Japan had around 12%. 

(Related on ThinkAdvisor: 25 Best Countries for Retirement Security: 2016)

Twenty-seven new funds entered the ranking during the past five years, with the U.S. contributing 10 funds on a net basis, followed by the U.K., South Korea, Australia, France, Peru, Vietnam and Italy.  

During the same period, Mexico had the largest net loss of funds from the ranking (four), followed by Switzerland, Germany and Japan with net three fund losses each.  

All told, the U.S. had 131 funds in the research, the U.K. 27, Canada 19, Australia 16, Japan 15 and the Netherlands 12. 

Sovereign pension funds continue to feature strongly in the ranking, with 27 of them accounting for 28% of assets and totaling around $4.2 trillion. 

Following are the P&I/Willis Towers Watson top 20 pension funds by assets. Rankings of sovereign pension funds are noted in parentheses. 

Top 20 Pension Funds 

Nyhavn in Copenhagen.

20. GEPF—South Africa

Total assets: $103 billion

Defined benefit: $103 billion

Defined contribution: $0

(No. 8-ranked sovereign pension fund)

 

19. ATP—Denmark

Total assets: $106.6 billion

Defined benefit: $0

Defined contribution: $106.6 billion

Toronto, Canada marina.

18. Ontario Teachers—Canada

Total assets: $124 billion

Defined benefit: $124 billion

Defined contribution: $0

 

17. Texas Teachers—U.S.

Total assets: $125.3 billion

Defined benefit: $125.3 billion

Defined contribution: $0

South Beach Miami, Florida.

16. Florida State Board—U.S.

Total assets: $$147.8 billion

Defined benefit: $139.2 billion

Defined contribution: $8.6 billion

 

15. New York City Retirement—U.S.

Total assets: $155.1 billion

Defined benefit: $155.1 billion

Defined contribution: $0

Kota Kinabalu City Mosque in Malaysia.

14. Employees Provident Fund—Malaysia

Total assets: $161.7 billion

Defined benefit: $0

Defined contribution: $161.7 billion

(No. 7-ranked sovereign pension fund)

 

13. New York State Common—U.S.

Total assets: $173.5 billion

Defined benefit: $173.5 billion

Defined contribution: $0

Shibuya Crossing in Tokyo, Japan.

12. Local Government Officials—Japan

Total assets: $176.2 billion

Defined benefit: $176.2 billion

Defined contribution: $0

 

11. California State Teachers—U.S.

Total assets: $181.9 billion

Defined benefit: $181.3 billion

Defined contribution: $581 million

Canal in Amsterdam.

10. PFZW—Netherlands

Total assets: $186.5 billion

Defined benefit: $186.5 billion

Defined contribution: $0

 

9. Canada Pension—Canada

Total assets: $201.9 billion

Defined benefit: $201.9 billion

Defined contribution: $0

(No. 6-ranked sovereign pension fund)

 The Kong Meng San Phor Kark See Monastery in Bishan, Singapore.

8. Central Provident Fund—Singapore

Total assets: $211.4 billion

Defined benefit: $0

Defined contribution: $211.4 billion

(No. 5-ranked sovereign pension fund)

 

7. California Public Employees—U.S.

Total assets: $285.8 billion

Defined benefit: $283.9 billion

Defined contribution: $1.9 billion

Oriental Pearl Tower in Shanghai. (Photo: AP)

6. National Social Security—China

Total assets: $294.9 billion

Defined benefit: $0

Defined contribution: $0

(No. 4-ranked sovereign pension fund)

 

5. ABP—Netherlands

Total assets: $384.3 billion

Defined benefit: $384.3 billion

Defined contribution: $0

Sungnyemun gate in Seoul, South Korea. (Photo: AP)

4. National Pension—South Korea

Total assets: $435.4 billion

Defined benefit: $435.4 billion

Defined contribution: $0

(No. 3-ranked sovereign pension fund)

 

3. Federal Retirement Thrift—U.S.

Total assets: $443.3 billion

Defined benefit: $0

Defined contribution: $443.3 billion

Fishing village in Norway.

2. Government Pension Fund—Norway

Total assets: $865.9 billion

Defined benefit: $0

Defined contribution: $0

(No. 2-ranked sovereign pension fund)

 

1. Government Pension Investment—Japan

Total assets: $1.2 trillion

Defined benefit: $1.2 trillion

Defined contribution: $0

(No. 1-ranked sovereign pension fund)

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